Hemant Shah President and CEO April 18, 2012 RISK MANAGEMENT SOLUTIONS, INC. A Portfolio of Opportunities DMGT Investor Day Hemant Shah President and CEO April 18, 2012
RMS Financial Performance: FY09 – FY11 Actual FY2010 Actual FY2011 Actual Net New Bookings $23m $41m $38m Revenue $215m $240m $256m Operating Margin 31% 30% 30%
Cat Risk remains top of mind for the industry Insurance industry weathers record 2011 cat losses of $100bn+ Growing number of companies increasingly investing in risk management systems and technology RMS releases v11 US hurricane and EU windstorm models
Sources of Revenue Growth: FY09 – FY11 Product Core Cat Models New Solutions Existing Clients 64% 13% Market New Clients 12% 11%
Sources of Revenue Growth: FY10 – FY12 Product Core Cat Models New Solutions Existing Clients 59% 16% Market New Clients 10% 15%
Illustrative Current Examples of Revenue Growth Product Core Cat Models New Solutions Existing clients continue to license more cat models China Typhoon was released in June 2011 Data Management Services have grown at 20%+ per year We offer our models as a hosted service (cloud, EGC) Existing Clients Market New clients represent 10% of new bookings New clients added in China Latin America and Europe RMS produced a mortality risk analysis to help capital markets investors quantify Dutch longevity risk New Clients
Projected Sources of Revenue Growth: FY10 – FY14 Key new drivers of growth will include NextGen solutions and LifeRisks solutions Core Cat Models New Solutions Existing Clients 35% 35% New Clients 10% 20%
Strong Track Record of Talent Investment RMS is a talent driven business We have achieved headcount growth of 15% over the past year We are investing across the breadth of the business, but the focus recently has been software development and technology Three senior executives in 2011 with a technology background Chief Platform and Services Officer - Bobby Soni Senior Vice President of Marketing – Rourke McNamara Chief HR Officer – Debbie Byron We have had sustained success in acquiring quality software development talent in a hot Silicon Valley labor market, competing with Google, Facebook and others and increased software headcount by 25% in the last year
RMS Raising our Profile with Recruits RMS wins ERE Excellence in Recruiting Award for “Best Careers Website 2012” On the Hunt for Tech Hires -- Wall Street Journal, April 11, 2012 Eager to raise its profile and hire database and software engineers and others, RMS rented San Francisco's popular 'Bacon Bacon' food truck for a day and set up camp at a cloud-computing expo in Santa Clara last November. RMS also co-hosted a Meetup, a gathering of strangers based on a common interest, with Vertica, a database developer whose technology is popular with information-technology pacesetters. The event drew 80 Vertica fans who mingled with RMS recruiters. The goal was to convince prospective job candidates that RMS is a place where innovators and creative thinkers can do high-impact work.
In summary: A Portfolio of Initiatives to Drive Growth Catastrophe risk and risk management remains top of mind for our industry On track to deliver high single digit revenue growth and 30%+ margins in FY12 RMS expects it can sustain its growth rates over the medium and long term A diverse mix of initiatives in various stages of development will drive this growth Ongoing demand for core business products and services New solutions will extend the RMS value proposition to existing clients “New – New” will continue to create opportunities in adjacent markets
Risk Management Solutions
The RMS Business Model License fees for each client are based on models, users, locations, business application and usage, and size of related catastrophe business Revenue from renewing contracts│Multi-year 90% + │ 40% + RMS Standalone revenue roll-forward (FY11/FY10) 100% RMS Standalone historical renewal rate 95% + Cash flow / operating earnings ~100%
Revenue and Customer Demographics Revenue from the P&C Insurance Industry 95% + Revenue from U.S. │International Clients 60% US │40% Intl Revenue contracted in U.S. Dollars Revenue from Long Term Clients (5 + Years) ~85% Revenue from Clients over $1 million in fees 75% + Revenue from largest single client 3%